4.2 Proof of Stake Post Merge Ethereum

Proof of Stake Post Merge (Ethereum 2.0)

Proof of Stake (PoS) is an alternative to Proof of Work. In PoS, instead of using computational power to mine blocks, participants "stake" their cryptocurrency as collateral in order to participate in the validation of transactions and block creation. Ethereum’s transition to Ethereum 2.0, which occurred after the Merge, shifted from PoW to PoS.

• Process: In PoS, validators are chosen to create new blocks and validate transactions based on the amount of cryptocurrency they have staked, rather than on their computational power. Ethereum’s new consensus mechanism is called Casper, which uses staking to ensure network security.

• Post-Merge Ethereum:

  • More energy-efficient: PoS is much less energy-intensive than PoW because it does not require massive amounts of computational work.

  • Staking rewards: Validators earn rewards for participating in the consensus mechanism by staking their ETH. The rewards are proportional to the amount of ETH they stake.

  • Security: The security of the network is now reliant on the total amount of ETH staked, and attackers would need to own a large portion of the total ETH supply to compromise the network.

• Impact of the Merge: Ethereum’s shift to PoS aims to address PoW's environmental concerns while also increasing scalability and security. PoS also allows for staking pools, where multiple users can pool their staked tokens to participate in the validation process and receive rewards.